WORLD TRADE  
ORGANIZATION  TN/RL/W/186 
3 August 2005 
 
 (05-3485) 
Negotiating Group on Rules Original:   English 
  
 
SUBMISSION ON REGIONAL TRADE AGREEMENTS BY  
THE SEPARATE CUSTOMS TERRITORY OF  
TAIWAN, PENGHU, KINMEN AND MATSU 
  
Paper by the Separate Custom Territory of Taiwan,
 
Penghu, Kinmen and Matsu  
  
The following submission, dated 27 July 2005, is being circulated at the request of the 
Delegation of the Separate Customs Territo ry of Taiwan, Penghu, Kinmen and Matsu. 
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RESPONSES FROM THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, 
KINMEN AND MATSU TO QUESTIONS  RAISED ON PAPER TN/RL/W/182 
STRENGTHENING THE MULTILATERAL TRADING SYSTEM 
VIA OPEN REGIONALISM:  PROPOSAL FOR 
REGIONAL TRADE AGREEMENTS TO 
CONTAIN AN ACCESSION CLAUSE 
FOR NON-PARTIES 
 
We are responding hereby to Members’ qu estions concerning our paper TN/RL/W/182 of 9 
June 2005, which were raised at the Rules Negotia tions Meeting on RTA of 14 June 2005.  We are 
also taking this opportunity to elaborate further on the main ideas contained in the paper, in the hope 
that Members will then be in a better position to  give favourable consideration to our proposal. 
A. Q
UESTIONS AND RESPONSES : 
1. Does the proposal to include an accession clause in RTAs exceed the Doha mandate?   
Paragraph 29 of the Doha Declaration states in  part that ministers “agree to negotiations 
aimed at clarifying and improving disciplines and procedures under the existing WTO provisions applying to regional trade agreements.”  One of th e disciplines applying to RTAs is that they should 
be made under the GATT/WTO and thus should not impa ir the integrity and nature of the multilateral 
trading system.  A concern for Members is that ther e have been so many RTAs, which have created so 
many exceptions to the cornerstone of the WTO, th e most-favoured-nation principle.  We believe that 
the inclusion of an accession clause to allow a third party to negotiate accession to the relevant RTA 
is an important way to improve the disciplines a nd procedures so as to maintain and enhance the 
multilateral framework of the WTO. TN/RL/W/186 
Page 2  
 
 2. Would it be necessary to amend the text of Article XXIV of GATT 1994?   
We think it is too early to discuss the legal form of amendment.  Members should focus on 
how to find consensus on the solutions before jumping into the technical work of legal drafting.  In 
our opinion, the previous WTO Understandings not only interpret provisions of certain articles of 
GATT 1994, but also introduce some new elements in to the operation of relevant articles.  Thus, 
although currently there is no provision in Article XXIV concerning the accession clause as we suggested, it may still be possible that such a require ment being incorporated in an understanding on 
the interpretation of Article XXIV is in line with WTO practice. 
3. Some Members expressed concerns about th e feasibility and acceptability of the 
requirement of parties to the RTA to allow th ird countries to join their RTAs, as well as 
possible political and other non-trade implications or considerations.   
We certainly understand these concerns.  We al so understand that different RTAs have 
different historical, economic and other bac kgrounds with their own specific preferential 
arrangements in their respective RTAs.  Recogni zing these concerns and different backgrounds, we 
agree that RTA members should be allowed to deci de the terms and conditions for third parties to 
negotiate accessions to the respective RTAs.  The minimum requirement is that RTA members should 
provide the opportunity for third countries to nego tiate accession to the RTAs.  Again, this is not a 
drastic proposal.  Whether or not a third party woul d be able to accede to an RTA depends mainly on 
whether they would be able to meet the terms and conditions set forth.  
4. Concern was expressed about the possibility of too many countries asking for the 
accession to relevant RTAs creating too many burdens and costing too much in terms of 
resources for the RTA members.   
In our opinion, this mandatory requirement of accession provision would not generate too 
many accession negotiations.  As explained in our pr oposal, there have been many RTAs with such 
provisions incorporated in them.  The fact is that  there have not been many accession applications 
made by third countries under these accession clauses.   We believe that the concern about limited 
resources to deal with too many accession applications is often hypothetical.  
5. Some Members requested clarification of th e mandatory or non-mandatory nature of 
the proposed provisions.   
As a matter of fact, the WTO does not have many non-binding or non-mandatory trade rules.  
We suggest following WTO practice in this rega rd and making the accession provision a mandatory 
one.  In our opinion, the mandatory requirement allowing third countries to negotiate accession to 
existing RTAs would be an effective way to bridge the difference between multilateralism and 
regionalism and to maintain the multilateral system.   
6. A question was raised about the meanings of  “respond sympathetically” and “accord in 
good faith adequate opportunities”.   
We must point out that the terms “sympathetica lly” and “good faith” were not created by us.  
They have been used in some international agreements.  Article XXIII of GATT 1994 requires 
Members being approached under this article shall give sympathetic consideration to the 
representations or proposals made to it.  There have  not been many disputes about the meaning of the 
term “sympathetic”.  Also, Article 31of the Vienna  Convention on the Law of Treaty provides in part 
that “a treaty shall be interpreted in good faith...”  Thus the “good faith” requi rement is a fundamental 
principle of treaty law, therefore the requirement  of good faith regarding accession applications does 
not impose much additional obligation on RTA member s.  The basic idea of the requirement in our 
proposal is that the RTA members should not bluntly reject an accession application without any 
consideration of the merit of such application.  TN/RL/W/186 
 Page 3 
 
 
 7. One Member raised an issue concerning implic ations in dispute settlement procedures.   
If we are to have mandatory provisions, certa inly they will give rise to possible dispute 
settlement procedures if the provisions are not followed.   However, this concern could be reduced to a 
very low level simply because, under our proposal, RTA members are only required to provide opportunities allowing third parties to negotiate an accession to the RTA;  there is no guarantee that 
they will succeed.  Furthermore, since RTA memb ers are allowed to design the accession terms and 
conditions, it is very unlikely that third countries w ill be able to bring a complaint under the Dispute 
Settlement Understanding only on the basis that they are not able to meet the terms and conditions to 
successfully join the RTAs. 
8. Concern was expressed about wh ether the accession provision is applicable to both a 
customs union (CU) and a free trade area (FTA).   
It could be that there are more historical and other ties between CU members, and it is also 
true that the formation of a CU needs greater integr ation.  However, our view is that although the CU 
and the FTA are by nature not exactly the same, we still cannot find a proper basis to distinguish 
between a CU and an FTA with regard to the n eed to make them more compatible with the 
multilateral system.  Both of them are exceptions to  the most-favoured-nation provision of Article I of 
GATT 1994 and they need to be arranged so as not to get further and further away from the 
multilateral trading system under the WTO.  Also, as suggested previously in our explanation, 
members of the RTAs will be able to design thei r own respective accession provisions in their RTAs.  
This will allow CU members to take into account th e particular historical and other backgrounds of 
their CUs and to hammer out the most suitable accession clauses.  
 
B. F
URTHER COMMENT : 
We must re-emphasize the fact that there have been so many RTAs established under the 
WTO with a wide diversity of content.  Much of the content is designed specifically to protect members’ domestic industries.  This has created di fficulties for the traders of other Members, and the 
trend has been worsening in this respect.  Theref ore, although it is possible for third countries to 
negotiate new RTAs with the original RTA members, we do not believe that this is the best way to 
solve the problem of the diversity that exists, or the trend of departing further and further from the 
multilateral system.  Allowing third parties to negotiate possible accession could have the effect of reducing the need for creating new RTAs, thus re versing the trend towards regionalization of the 
trading system.  In our view, RTAs that are by natu re open to others to join could help the original 
RTA members to enhance the benefits arising from market opening under their RTAs, without the 
need to create new RTAs.  
In summary, we appreciate Members’ valuab le comments on our proposal and the positive 
discussions on relevant issues that have arisen.  We  hope our responses have reduced the concerns of 
Members, and we look forward to our proposal becoming part of the WTO framework dealing with 
RTAs, so that they may be brought fully into line with the multilateral system under the WTO. 
 
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